This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Assurant Shares Pummeled

Stocks in this article: AIZ BAC WFC JPM

NEW YORK ( TheStreet) --

Assurant's (AIZ - Get Report) stock took at hit Wednesday after questions were raised over its the ethics surrounding its force-placed insurance business.

The stock slid down 9 percent, to $36.51, according to the latest trading numbers.

Investors dropped the stock amid reports that regulators will be investigating the ethics around the forced-placed insurance industry as Dodd-Frank Act gears up. An article in American Banker alleged that banks were forcing consumers to pay more for the policies than they might otherwise be charged if they sought out the insurance rates themselves.

Assurant is the largest forced-placed insurance provider followed by Bank of America's (BAC - Get Report) owns an insurance subsidiary, Balboa Insurance Group. The third largest insurer is Sterling Insurance Company.

"The real question for investors is whether or not there will be some actions taken by regulators to regulate these insurers more closely," said SunTrust Robinson Humphrey analyst Mark Hughes. "Assurant has a high profit margin, in the low-to-mid 20's per dollar premium. Those profit margins could come under pressure. That business is also two thirds of Assurant's business."

The questions surrounding forced place insurance could also affect Bank of America's potential sale of the subsidiary.

"Balboa Insurance Group has been rumored to be up for sale by Bank of America in the past," Hughes said. "It adds to the uncertainty surrounding the business. If I were a buyer I would see how Dodd Frank would impact it."

The article also alleges that that banks such as Bank of America, Wells Fargo (WFC - Get Report) and JP Morgan Chase ( JPM) receive commissions or reinsurance fees on the policies they purchase for investors and borrowers.

--Written by Maria Woehr in New York.



To contact the writer of this article, click here: Maria Woehr.

To follow the writer on Twitter, go to http://twitter.com/newsgirlmw.

To submit a news tip, send an email to: tips@thestreet.com.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs